Post-Ozempic patients may eat more calories, Deutsche Bank survey finds

The polling was conducted in December, and involved 600 U.S. consumers, Deutsche Bank said in a research note. Seventy percent of the participants were using a GLP-1 drug when questioned, while the remaining 30% had stopped taking this type of medication. The investment bank conducted the survey as part of its attempts to better understand the long-term implications of anti-obesity medications, which also include Eli Lilly’s Zepbound, on the food and beverage industry.

The survey found that among the patients still on medication, about 30% said they ate “a little less,” while 22% said they ate a “a lot less.”

“Perhaps surprisingly, 17% of respondents stated that they were consuming a lot more and 18% a little more,” the bank’s analysts wrote. “This meant that a net 18% of those who were using GLP-1 medication were eating less.”

“However, amongst those who were no longer taking GLP-1 this more than reversed with a net 30% stating that they were now eating more than they were prior to using GLP-1 medication,” the report said.

“We believe that the survey conclusions back up our view that GLP-1 is not a reason in of itself to avoid investing in Food and Beverage stocks,” the analysts wrote in the note.

Without a doubt, 2023 was a year worth forgetting for many food and beverage stocks, with many underperforming the market. For those shares that managed to eke out a gain in 2023, the upside likely came late in the year.

Many food and beverage stocks began falling in the summer, as awareness of GLP-1 medications like Wegovy spread. The move accelerated after the release of data from Novo Nordisk in August showed that the drugs could help patients not only lose weight but also improve their cardiovascular health. Investors started to worry that people would widely adopt the drugs and there would be all sorts of ripple effects, which started to be reflected in stock prices.

But in the midst of the market’s year-end rally, a fresh batch of data also showed that patients who took Zepbound and stopped regained around half the weight they had lost while they were on the treatment. That finding helped some of the affected stocks to recover.

Shares of Mondelez, the maker of Oreos and Cadbury, gained 16% over the past three months, which helped it tally an 8% gain over the past year. Kraft Heinz shares posted a 10.2% loss over the past year, but has reaped a 19% gain over the three-month period. U.S.-traded shares of Nestle are up more than 5% over the past three months, but the stock has a 2% loss over the past 12 months. Unilever shares follow a similar pattern. Shares of the Ben & Jerry’s owner are up nearly 2% over the past three months, but are down more than 3% over the past year.

Deutsche Bank said the impact of anti-obesity medicines on food and beverage stocks needs to assessed “in the context of all weight loss programs and the possibility that GLP-1 cannibalises such programs, limiting the net effect on food and beverage producers.”

Dr. Shantanu Gaur, founder and CEO of Allurion Technologies, said the results of the survey are not surprising. Allurion, which went public via SPAC in August, is developing a gastric balloon and behavior modification programs to treat obesity.

“This is something that you would expect,” he said explaining that “appetite can return with a vengeance” once patients stop GLP-1 therapy. Bodies tend to seek out a “set point,” or a preferred weight mass where they will return to without intervention and behavior modification.

Semaglutide, the active ingredient in Ozempic and Wegovy, acts like a natural hormone, glucagon-like peptide-1, or GLP-1, in the body to control insulin levels in the blood and suppress appetite. Zepbound (tirzepatide) mimics GLP-1 as well as a second incretin, glucose-dependent insulinotropic polypeptide, or GIP. Once these hormones are no longer supplemented in the body, hunger signals will return.

The American Medical Association has said that obesity is a chronic condition, and Novo Nordisk and Eli Lilly expect patients who take incretin medications will need to be on the drugs long term to control their weight. In this way, incretin drugs are like medications that are taken for conditions such as high blood pressure and cholesterol. Patients aren’t told to stop taking those drugs once their blood pressure and cholesterol levels fall to a healthy range. If they do, the readings are likely to spike again.

But even with blood pressure medication, compliance can be an issue. Dr. Gaur said about half of people on cholesterol medication will stop taking it after a year. The rate of compliance is even lower with anti-obesity medications, he said.

Meanwhile, Deutsche Bank said it expects interest in weight loss programs may be peaking as shown by internet search data, and that tends to be a good time for investors to hold food and beverage stocks. Nestle and Unilever are the firm’s top European picks, while Mondelez and Kraft rank among its favored U.S. staples names.

“The main point is that usage of GLP-1 drugs is not just a pure addition to the total number of people on weight loss programs, it is part of the entire eco-system,” the report said. “We suspect that many of the answers given with regard to consumption would be similar for those given by many people when they start a weight loss program.”

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